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Naushad Merali Plots Spire Bank Coup

A boardroom war at is likely to see Spire Bank sink into further troubles has erupted pitting a section of the board members against those appointed to cater for the interests of the controlling party Mwalimu National Sacco.

At the centre of the war is businessman magnate Naushad Merali who holds a 25pc stake at the bank, and is now plotting a coup at the financial institution whose remaining 75pc stake is held by the financially troubled Mwalimu National Sacco.

In 2015, Mwalimu National Sacco acquired a majority stake in Equatorial Commercial Bank, in which Merali had a controlling interest. After the acquisition, the bank was rebranded into Spire Bank.

Recently, Spire Bank senior managers were summoned by the Central Bank of Kenya governor Patrick Njoroge to shed light on the financial status at the institution. CBK sought to know the status of the bank as well as its liquidity ratio so as to advise on the next course of action.

Those summoned included Norman Ambunya, then managing director. Ambunya was appointed as the managing director in 2015. He was previously the head of finance, administration and treasury at the bank.

Sources say when the CBK governor sought clarification on why the bank was going down, Ambunya was unable to provide a satisfactory response, prompting the governor to walk out of the meeting in protest.

After the meeting, Ambunya tendered his resignation as managing director, citing frustrations from a section of the board.

But a week after his resignation, a section of the board prevailed upon him to rescind the decision.

However, CBK refused to allow him back, stating that its guidelines provide that once a CEO has unceremoniously left the institution, he cannot be allowed bank.

Sources say the war between the pro-Merali and pro-Mwalimu National Sacco directors has exploded to an extent that the camps are exchanging dirty emails.

Merali sidekicks on the board are Dan Ameyo and Benson Milai. The directors sympathetic to the teacher’s cause include Teresa Mutegi, chair of the board. She is also the chairlady of Mwalimu National Holdings Limited and serves as director of Mwalimu Asset Management Limited.

Before his resignation, Ambunya was also sympathetic to the teachers’ cause.

Christine Sabwa, a non-executive director, is also sympathetic to the teachers’ concern. Sabwa is the chief operating officer for Airtel Money Business (Africa Region) at Bharti Airtel International, based in Nairobi.
Michael Waweru, a non-executive director, is said to be watching the unfolding developments from the wings.

Sources say after Abunya’s resignation, a one Muia, formerly the general manager, was appointed to act as the managing director.

However, Muia is said to be taking instructions from the minority shareholder, a move that has not gone down with other directors who feel Merali is out to kill the institution.

Since 2015, Mwalimu National Sacco has soaked in losses of more than Sh2 billion following the acquisition of a majority stake in Equatorial Commercial Bank, now Spike Bank.

The Sacco, owned by teachers, invested a total of Sh2.4 billion to take a 75pc stake in the lender, which later rebranded to Spire Bank.


The bank has remained in losses that have whittled down its book value to Sh551.6 million as of September 2017, placing the worth of Mwalimu’s stake at a mere Sh413.7 million.

The buyout of the bank raised eyebrows when it became public, with various government agencies halting the deal but later approving it. It emerged that Mwalimu had agreed to make the acquisition without conducting due diligence on the bank.

Former officials of Mwalimu were also accused of having a conflict of interest, with ex-CEO Robert Shibutse having worked for the then Equatorial Commercial Bank and other companies associated with Merali.

However, questions are now being asked as to whether Merali is working on the bank’s downfall to re-buy the bank at a song

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